Tort
Torts -- wrongs done to others -- are the domain of civil law. As with contracts, there is a "proper law of the tort," which country has the most significant relationship with the event or the parties. The law of that country applies. Therefore, the place where the wrong occurs is usually which law applies. This is similar to the way tort cases work in the United States. The state in which the offense took place is the state whose laws are followed in adjudicating the case. In Australia, the law of the "place of the wrong" always holds, without exception. Sometimes, however, determining the place of the wrong can be a challenge.
Companies
In Australian law, the place of incorporation determines whether a corporation exists and therefore what powers it has. Who are the members, shareholders and officers? What are their rights and responsibilities? In Australia, for example, a foreign company has all the powers and capacities it has in its home country, subject to applicable Australian law.
Rome Convention and European Union Rules
Contracts
The Rome Convention on the law Applicable to Contracts (1980) requires that companies make a choice about which law will be applicable to them. If the parties fail to name a preference, the convention has different rules that apply -- the residence of the party who is to effect the performance; the place where the performance of business takes place. The Convention does not override all other agreements and trade practices between countries.
The rules are different if the contract involves the supply of goods and services to a consumer. In these cases, mandatory rules of the country's consumer protection legislation where the wrong occurred apply. The seller of...
As to which court has jurisdiction to hear the matter, the module cites Australia as an example. An Australian court would have jurisdiction to hear the case if the contract:
Is made within the jurisdiction
Is governed by Australian law
Is breached in Australia or the parties agree to adjudication in Australia
Australian courts can also decline to hear a case if it doesn't believe it is the right forum.
Corporations
Since 2004 and the introduction of European SE companies, some interesting conflicts of jurisdiction have ensued. If the company was first registered in a single country, it is subject to those laws. As an SE company, the corporation is also subject to additional regulations of the Union. The corporation doesn't have to abide by all the laws of all the countries of the Union, just the specific SE rules and the rules of their country. This can be a distinct advantage for SE companies at they can forum shop and choose the country which best suits the business' needs before making a choice about where to base its operations. The company can then operate both under the jurisdiction of the country with the most favorable laws and have the privileged position of an SE throughout the Union. This kind of behaviour will continue for the foreseeable future; there has been some consistency of law across the Union recently, but there are still distinct differences from country to country. It is worth a corporation's time and effort to do its research before deciding where to incorporate.
